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For a Monopsonist the Marginal Cost of Increasing Its Workforce

Question 38

Multiple Choice

For a monopsonist the marginal cost of increasing its workforce will always be greater than the wage rate because


A) there is not good factor substitution in a monopsony.
B) the wage rate offered the newest employee must be paid to all workers.
C) the industry will be a closed shop.
D) a normal rate of return must be paid to the owner.

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